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Volume 5 - Opinions of Counsel SBEA No. 80

Opinions of Counsel index

Special assessments and special ad valorem levies (sewer charges) (liability of special franchise property);
Special franchise assessment (special assessments) (special ad valorem levies) (liability) - Civil Practice Law and Rules, Art. 78; Real Property Tax Law, §§ 102(15), 102(17), 622:

Special franchise property which benefits from a service provided by a special district may be liable for charges imposed by or on behalf of the district if the special franchise property receives a benefit from such service. Whether special franchise property is so benefited is a question of fact and determinations thereon are subject to review pursuant to Civil Practice Law and Rules, Article 78. Once such determination is made, special franchise properties are liable for annual special assessments and special ad valorem levies to defray the costs of such special districts.

Our opinion has been requested as to the liability of special franchise property for special ad valorem levies and special assessments for special district improvements or services.

Special districts are established “for the purpose of carrying out, performing or financing one or more improvements or services intended to benefit the health, welfare, safety or convenience of the inhabitants of such district or to benefit the real property within such district” (Real Property Tax Law, § 102(16)). Charges are imposed by or on behalf of special districts by means of special ad valorem levies or special assessments.

A special ad valorem levy is a “charge imposed upon benefited real property in the same manner and at the same time as taxes for municipal purposes to defray the cost, including operation and maintenance, of a special district improvement or service . . .” (id., § 102(14)). (emphasis supplied) A special assessment includes a “charge imposed upon benefited real property in proportion to the benefit received by such property to defray the cost, including operation and maintenance of a special district improvement or service . . .” (id., § 102(15)). (emphasis supplied)

Special franchises (defined in Real Property Tax Law, § 102(17)) are classified as “real property,” “property” or “land” for taxation purposes (id., § 102(12)(h)), and all real property is subject to taxation, special ad valorem levies and special assessments unless exempt therefrom by law (id., § 300). Special franchises are not made exempt from special assessments under any law and are specifically made subject to special ad valorem levies by statute (id., § 622). In a strict legal sense, therefore, special franchises are liable for special assessments and special ad valorem levies.

Whether properties, including special franchises, within a special district are benefited by the district improvement or service is a question of fact and statutes authorizing the establishment of special districts (e.g., Town Law, Art. 12; County Law, Art. 5-A) make provision for notice to owners of property deemed benefited and afford such owners an opportunity to be heard as to their inclusion within the district. Owners who consider themselves aggrieved by reason of the final determination as to their inclusion within the district may seek judicial review pursuant to the provisions of Article 78 of the Civil Practice Law and Rules. Owners who fail to pursue this remedy within the time prescribed by said Article 78 may not seek further administrative review at a future time as to their inclusion within the district; their remedy, if any, being judicial in nature (55 N.Y. Jur. Special Assessments § 388; Bentley v. County of Onondaga, 41 Misc.2d 302, 245 IM.Y-S.2d 479).

The various special district enabling statutes make provision for annual public hearings in relation to special assessments and make provision for judicial review thereof pursuant to Article 78 of the Civil Practice Law and Rules.

Therefore, it is our opinion that special franchises which benefit from special district improvements or services are liable for special assessments and special ad valorem levies to defray the costs thereof. To the extent that 1 Op.Counsel SBEA No. 93 may indicate otherwise, that opinion is hereby modified.

October 24, 1978
Revised

Updated: